Couple Signing PaperworkWhen a marital home is purchased before the marriage and/or even paid in full prior to “the big day,” it becomes a complex issue in asset distribution – especially if the premarital home is one that was purchased prior to the marriage and only titled in one of the spouse’s names. Once the petition is made for divorce, the distribution of assets will become a cornerstone of the proceedings – and often, the highlight of contention in the proceeding. Florida is an equitable distribution state; therefore, all common property that the two parties possessed during the marriage must be divided “equally” in the divorce.

Community property law states that each spouse has equal ownership to all income/assets/liabilities earned or incurred during the marriage. But, in an equitable distribution state, such as Florida, the distribution is not mandatory. The court can, in their discretion, distribute more of the assets to one spouse than the other based on an analysis of factors. The ultimate goal, however, is to achieve fair, balanced, and equitable distribution for both parties.

When the Marital Home Was Purchased Pre-Marriage, but Both Parties Resided in the Home

It is not uncommon for a couple to reside together in the home, contribute toward the mortgage, but only one party is listed on the loan and/or even the deed. If this situation applies to you, even if you have made the down-payment on that home, the courts will often rule in favor of the party with his or her name on the deed. This includes if you have paid the mortgage solely – essentially giving your soon-to-be-ex a very expensive parting gift.

This is because Florida courts cannot legally award a home that is not owned by you. You may, however, be awarded some of the equity as part of the equitable distribution laws, but you cannot be awarded the home itself.

When the Equity Must Be Divided, but the Home is Not Paid in Full

Pursuant to Florida statutes, the courts must start with the premise that all assets must be equally divided – unless there is a justification for an unequal distribution of such assets. The contribution of a spouse toward non-marital property is a factor that courts can take into consideration – and this is where you could regain some of the home’s equity.

The courts are only allowed to divide marital assets. These are defined under Florida Statute 61.075(6)(a)b as all marital assets acquired during the marriage, funds that were earned and/or used during the marriage, and anything that enhances the value or appreciation of the non-marital assets from either party.

In this instance, you could stake a claim in the pre-marital home, especially if you are paying the mortgage with your own earnings, you are increasing the value of that home or the equity, then your contribution will be considered during the distribution of the assets.

Kaaa v. Kaaa – How Much Equity am I Entitled To?

The leading case that is referred to when deciding how much equity to distribute is that of Kaaa v. Kaaa 58 So.3d 867 (Florida 2010). In this case, which was decided by the Supreme Court, the couple had been married for 27 years. Six months before the marriage, the husband purchased the home where the couple lived for their entire marriage. He had purchased the home for $365,000 and provided a $2,000 down-payment. The wife had provided a $500 down payment. The parties both renovated the car port, and at the time of the trial, the home was worth much more than was originally paid. The mortgage had been paid down mostly by the husband. According to the courts, Mrs. Kaaa was only entitled to her portion of the enhancement in value – meaning the remodel of the car port. The equity in the home was also equally divided, because the courts concluded that the passive appreciation of the home was still a marital asset.

Because of this case, the courts provided three steps in determining how much passive appreciation should be considered:

  1. The current fair market value of the property
  2. If there has been any passive appreciation
  3. Whether the passive appreciation falls under Florida Statutes

Beller & Bustamante, P.L. – A Trusted Resource for Divorce and Marital Assets

The laws regarding marital assets are complex – and the state of Florida does not make it easy to determine what is eligible for equitable distribution. If you are considering divorce or you need a consultation regarding your marital assets, the family law attorneys at Beller & Bustamante are recognized as experienced and knowledgeable attorneys in all family law-related matters – including the distribution of a premarital home. Schedule a consultation today with one of our attorneys by calling (904) 288-4414, or fill out our online contact form with your questions.